2010 U.S. Benefits Enrollment

1. 2010U.S. Benefits Enrollment October 20, 2009 Global Benefits and HealthConnections

2. Agenda Key concepts and changes for 2010 Plan design Account comparison Processing of claims and accounts Health Connections and incentives Plan comparison tool Resources Q&A

3. 2010 Key Points Cisco’s goal is to reward a culture of health while maintaining a highly competitive benefit program Medical plan changes will increase your out-of-pocket costs - the company is offering more financial incentives to help offset or completely cover these increased costs Those who choose not to engage will most likely incur higher expenses as services are used

4. What Employees Need To Do • Complete the personal health assessment to be eligible to earn incentives Complete by November 30 to receive money in January • Review and understand the changes being made for 2010 • Use the Medical Plan Comparison tool to evaluate your options – electing a different plan may lower your out-of-pocket expenses • Complete your benefits enrollment by November 13th

5. Changes for 2010 Medical plan changes (higher deductible, new coinsurance, higher out-of-pocket limits for CIGNA/UHC, new copays for HMOs) HealthConnections incentives increased and extended to spouse/domestic partner No paycheck contribution changes on PPO, HPSP, OOA; up to 15% on EPO and 12% or less for HMO Employees in PPO/EPO/OOA and HMO will receive new ID cards Mental/behavioral health and substance abuse services will be covered at the same benefit level as medical services

6. Changes for 2010 (cont.) • Spousal surcharge increases from $15 to $25 per month • Special Open Enrollment for Long-Term Care Insurance • Dependent eligibility audit planned for 2010 • Spouse life insurance taxable (imputed income) • Failure to substantiate FSA claims will cause debit card to be deactivated and any final amounts unsubstantiated must be repaid to the company or will be subject to collection or inclusion in W2, per IRS rules

7. 2010 PPO and EPO-style Plans • No increase in employee contributions for PPO (UHC Choice Plus & CIGNA Open Access Plus) • 15% increase for EPO (UHC Choice, CIGNA Open Access) • Higher deductibles and out-of-pocket maximum, new coinsurance, new Health Incentive Account

8. 2010 UHC Health Plus Savings Plan • No increase in employee contributions for HPSP • No change in high deductible medical plan design • Cisco contribution to HSA split between annual contribution and health incentives

9. 2010 HMO Plans – Kaiser and Harvard Pilgrim • Paycheck contributions increases with trend 12.1% for Kaiser CA, 7.4% for Kaiser GA, and 1.0% for HPHC • Copay increases for office visits and Kaiser pharmacy

10. $ PPO EPO OOA HIA Your Medical Plan Decision Drives Your Financial Account • If you enroll in the PPO, EPO or OOA, an HIA will automatically be established for you.

11. $ Health Plus Savings Plan HSA Your Medical Plan Decision Drives Your Financial Account • If you enroll in the Health Plus Savings Plan, an HSA will automatically be established for you.

12. $ CASH HMO Your Medical Plan Decision Drives Your Financial Account • If you enroll in an HMO, no financial account will be established. • Incentives will be paid in cash to your paycheck.

13. HIA (PPO/EPO/OOA) CASH (HMO) HSA (HPSP) Health Incentives • Up to $800 employee only • Up to $1,200 with covered dependents Health Incentives • Up to $300 • To your paycheck quarterly (no account) Health Incentives • Up to $800 employee only • Up to $1,200 with covered dependents + Cisco contribution • $500 employee only • $750 with covered dependents + Employee contribution* • Up to $3,050 employee only • Up to $6,150 with covered dependents How Financial Accounts Are Funded * $1,000 Catch up contribution if 55+

14. HIA (PPO/EPO/OOA) HSA (HPSP) CASH (HMO) + Optional Health Care FSA up to $5,000 + Optional Limited Purpose FSA up to $5,000 for dental and vision only + Optional Health Care FSA up to $5,000 Flexible Spending Account Options

15. HIA $ $ HSA $ $ • Account belongs to company • Rolls over year to year • No interest • Not portable • Use only for medical and Rx while at Cisco plus COBRA • Account belongs to employee • Rolls over year to year • Earns interest • Portable • Employee & tax dependent can use • Taxable if used for non-medical How You Use the $$ in Your Account

16. Health Incentive Dollars – UHC and CIGNA • As you complete programs (Alere, or CIGNA/UHC), money is credited to your Health Incentive Account monthly and Health Savings Account quarterly. • You can view your completed activities on the Alere website • PPO/EPO/OOA: You can view the balance in your HIA on the CIGNA or UHC website • HPSP: You can view the balance in your Health Savings Account on the Chase website • Money can be in your account as early as January

17. PPO/EPO/OOA – illness visit Claim is sent to CIGNA/UHC for processing CIGNA/UHC determines if there is money in the Health Incentive Account (HIA) If yes, the amount you owe will be paid to the provider from the HIA If there is NO money in HIA, you pay the appropriate charge to satisfy the deductible or coinsurance You can submit claims later to get reimbursed from HIA

18. PPO/EPO/OOA – Pharmacy Claim CIGNA: If there is enough money in the HIA to cover the copay, the amount you owe will be taken from the HIA and paid to the pharmacy UHC: You must pay the copay when the prescription is purchased. If there is money in the HIA, you will automatically get reimbursed by UHC later and can sign up for direct deposit to make the process easier. If at the point of purchase there is not enough money in the HIA, and funds are added later, you can file a claim to get reimbursed from the HIA. Process is the same for mail order or retail

19. HPSP Medical or Rx Expense Medical claim is sent to UHC for processing Once the deductible is met, the plan pays 100%. If the deductible has not been met, you will receive an Explanation of Benefits from UHC showing the amount due after any network discounts You are responsible for paying the provider directly for medical expenses that total less than the deductible. For prescription drugs, you must pay the full discounted cost, until the annual deductible is met. You can use money in the HSA to pay medical expenses at any time, based on the balance in the account. Receipts should be kept to document tax deductible costs in the event of an IRS inquiry.

20. 2010 Health Incentives

21. Health Incentive Opportunities • Available to those enrolled in the PPO, EPO, HPSP and OOA medical plans • Those enrolled in an HMO plan can earn up to the current $300/year in cash

22. Employee Scenarios

23. Model your Medical Plan Options with theMedical Plan Comparison Tool www.cisco.benefitscompare.com

24. Communication, Tools and Resources Communication: October 1st: Interactive VoD on Health Incentives October 20th: Interactive VoD on HSA, HIA and FSA / LP FSA October 14th: OE Guide at employee homes Oct.13th – Nov.13th:: Employee WebEx & SJ/RTP in-person meetings HRC http://hrc.cisco.com or 866 282-3866 U.S. Benefits portal http://wwwin.cisco.com/employee/benefits Family-accessible website http://www.cisco.com/web/usbenefits Medical plan comparison tool http://cisco.benefitscompare.com HealthConnections http://wwwin.cisco.com/go/health U.S. Open Enrollment is October 26th – November 13th

25. Next Steps • Take a fresh look at your medical plan options • Compare cost and plan design through the medical plan comparison tool • Take the Personal Health Assessment (if you want to earn incentives in 2010) • If you don’t want to make changes, your 2009 coverage will carry forward into 2010, except: • Flexible Spending Accounts require an election each calendar year • Changes must be made at the U.S. Benefits Website by November 13th: http://wwwin.cisco.com/employee/benefits

26. Questions and Answers

27. Glossary Deductible – amount you pay before the benefit plan pays for services Coinsurance – percentage sharing of costs. For example, if the plan has a 90% coinsurance feature, the plan pays 90% and you pay 10%. Out-of-pocket maximum – limit that applies to your coinsurance payments and may include your deductible. Once your coinsurance amounts equal the out-of-pocket maximum, the plan pays 100% of reasonable and customary charges. Co-pays – flat dollar amount you pay for a medical service. HIA (HRA) – Health incentive account (under IRS rules, a Health Reimbursement Account or HRA). Part of the medical plan (PPO/EPO/OOA) that holds your incentive payments. Balances are used to cover deductible and coinsurance costs you have to pay. Account rolls over but does not earn interest. HSA – Health Savings Account. Personal cash account that is only available if you have a high deductible health plan such as the Health Plus Savings Plan. If used for medical expenses then benefits, contributions and earnings are not taxed under Federal tax rules. Account rolls over and may earn interest or be invested. FSA – Flexible spending account (may be health care or dependent care). “Use it or lose it” account that can be used to pay medical or dependent care expenses each year. LP FSA – Limited purpose flexible spending account (medical only). “Use it or lose it” account that can be used to pay dental and vision expenses only each year. Only available if you participate in a high deductible health plan such as the Health Plus Savings Plan.

28. Glossary (continued) HealthConnections –Cisco’s health enhancement program for employees and their families to provide customized resources and information to take charge of their health and well-being. PPO – Preferred provider organization. A health plan that uses network and out-of-network providers. Examples are Choice Plus (UHC) and Open Access Plus (CIGNA). EPO – Exclusive provider organization. A health plan that uses network only providers. Examples are Choice (UHC) and Open Access (CIGNA). OOA – Out of area plan. Medical coverage for employees outside major network and metropolitan areas. HPSP – Health Plus Savings Plan. Cisco’s tax qualified high deductible health plan. HMO – Health maintenance organization. A legally qualified health care organization that provides medical services in a geographic area. Examples are Kaiser and Harvard Pilgrim Healthcare. R&C/U&C – Reasonable and Customary/Usual and Customary. The amount that health care providers charge in a geographic area for a specific service. Amounts charged by a specific provider may be in excess of R&C/U&C if the provider is out-of-network. Personal Health Assessment (PHA) – An online tool that gives you a personalized analysis of your current health status and lifestyle practices, and may include data such as height, weight, cholesterol, triglycerides, blood pressure and blood glucose measurements. Participating in the PHA is a requirement in order to receive incentives from HealthConnections.

29. Glossary (continued) Preventive Care – Provided as recommended by the US Preventative Service Task Force: The U.S. Preventive Services Task Force is an independent panel of experts in primary care and prevention that systematically reviews the evidence of effectiveness and develops recommendations for clinical preventive services. Sponsored since 1998 by the Agency for Healthcare Research and Quality (AHRQ), the Task Force is the leading independent panel of private-sector experts in prevention and primary care. For more information please visit: http://www.ahrq.gov/clinic/uspstfix.htm#pocket Publication 502- describes qualified medical expenses. For more information please visit: http://www.irs.gov/publications/p502/index.html